Is Yelp poised to cash in on mobile advertising gains?

- Jul 02, 2013 7:32 am

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Like TripAdvisor, Yelp has a major headstart in restaurant and other local business reviews, and that should be a big plus in its competition with the likes of Facebook, TripAdvisor and European restaurant review sites. Will mobile advertising resonate with Yelp’s users? The jury is out on that.

— Dennis Schaal

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Yelp shares have been a big winner this year, gaining more than 80% year-to-date. One research firm thinks there’s more upside from here.

Pacific Crest analyst Evan Wilson initiated coverage on the San Francisco-based Yelp, starting shares at “outperform” with a $40 price target. Wilson believes that Yelp, which provides users with reviews of local businesses, is poised to benefit from the coming boon in mobile advertising, with its 39 million user-based reviews. “The depth of its reviews is a very valuable commodity and difficult to replicate,” Wilson wrote in the report. “Yelp’s biggest innovation was combining a user review site with community features and a modern desktop and mobile interface.”